German business mood leaps in August

NinaAdam

FRANKFURT--German business sentiment leapt in August amid an improving export outlook, the Ifo institute said Tuesday, confirming that Europe's largest economy is moving up a gear following a weak start to the year.

The Ifo business confidence index increased for the fourth consecutive month, to 107.5 in August from 106.2 in July, and above economists' forecasts of a rise to 107.0.

The data follow an upbeat report by Germany's purchasing executives, indicating business activity increased at its fastest pace in seven months.

The business climate in manufacturing "rose significantly," to its highest level since April 2012, as firms see better exports ahead, said Kai Carstensen, who is in charge of the Ifo survey.

Confirming this trend, the Ifo sub-index measuring companies' expectations for the next six months rose to 103.3 in August from 102.4. in July. The roughly 7,000 business managers polled by Ifo each month were also more satisfied with their current business situation: the corresponding sub-index climbed to 112.0 from 110.1.

Germany's exporters are taking heart from signs the euro zone's nascent recovery is beginning to spread to southern Europe and indications China--the top export destination for Germany's machinery and equipment makers--is regaining some of the growth momentum lost in the first half of the year.

But the Ifo business confidence index is still below its historical high of 115.0 in February 2011.

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